The Producer Price Index for final demand edged 0.1% higher
during August (1.8% y/y) following a 0.2% July rise. A 0.1% gain had been
expected in the Action Economics Forecast Survey. Producer prices excluding food &
energy strengthened 0.3% last month (2.3% y/y) after edging 0.1% lower in July. A 0.2%
rise had been expected. The PPI excluding food, beverages and trade services,
another measure of underlying price inflation, increased 0.4% (1.9% y/y) last
month after easing 0.1% in July. It was the largest increase in three months.

A 2.5% decline in energy prices (-6.9% y/y) in energy prices
held back the increase in the PPI overall. It reversed the July increase. The
decline reflected a 6.6% fall (-7.7% y/y) in gasoline prices which followed a
5.2% rise. Home heating oil prices fell 12.1% last month (-11.0% y/y) after
rising 8.0% in July. The cost of electric power
rose 0.3% (2.7% y/y) after strengthening 0.9%. Offsetting this increase was a
0.4% decline in natural gas prices, which were unchanged y/y.